Economics 101 Revisited – Burn Your Textbooks, Use Common Sense
By Matthias Chang
The head of one of the think tanks in Malaysia recently said that Malaysian financial journalists should not be faulted for failing to warn against the global financial tsunami.
What utter rubbish. OK, they may be forgiven for burying their heads in the sand in 2007. But, they did not even get it right in the first quarter of 2008. In the last quarter of 2008, they were still singing praises about the Malaysian economy and that 2009 would register a robust growth.
Maybe the head of this think tank was making excuses for himself and deflecting any criticisms to that of financial journalists. How pathetic can one get?
And now, the Governor of Bank Negara has lately conceded that she underestimated the severity of the impact of the global financial tsunami on Malaysia.
Put it bluntly, such journalists are employed to sell good news so as to lure greedy and stupid investors to gamble in the stock market after the big boys and insiders have made their moves and are waiting to cash out.
Gamblers are driven by herd instincts. They care not about fundamentals. That is why I never hesitated to call them suckers. And they are suckers through and through.
Every country has been following the FED in stimulating the economy and pumping vast amounts of monies into the economy. These experts called it “quantitative easing” instead of the simple term, creating money out of thin air – printing money electronically.
For a technical explanation, I reproduce here an extract from Wikipedia:
